With President Obama presenting his proposed budget for 2013, the question of how to deal with the Bush-era tax cuts, scheduled to terminate at the end of 2012, is once again on the table.

The Program for Public Consultation presented a representative sample of Americans with options for dealing with the tax cuts, including–for each option–a description of the budgetary consequences and two strongly-stated arguments in its favor.

In conclusion, seven in ten (71%) favored extending the cuts for income below $250,000. This included 22% who favored extending the cuts for all income levels, as well as 49% who favored limiting the extension to income below $250,000.

A similar margin (73%) favored terminating the cuts for income over $250,000. This included 24% who favored terminating them for all income levels, as well as the 49% who favored terminating them only for income above $250,000.

These positions were relatively consistent regardless of party affiliation. Extending cuts for household income below $250,000 was supported by 74% of Republicans, 65% of Democrats, and 76% of independents. Letting cuts expire for higher incomes was supported by 65% of Republicans, 83% of Democrats, and 67% of independents.

Interestingly, only a third of Republicans (33%) endorsed the position of making the tax cuts permanent at all levels. Among Republicans, having the cuts expire only for high incomes was the most common answer (39%). About as many Republicans (24%) as Democrats (28%) favored having the tax cuts simply expire for all income levels.

The study was conducted by the Program for Public Consultation, a joint program of the Center on Policy Attitudes and the School of Public Affairs at the University of Maryland. “Public consultation” seeks to reveal how the public responds when it hears the kind of information and arguments that policymakers hear when making decisions, thus eliciting a clearer expression of the public’s values.

Respondents were also given the opportunity to modify the income threshold for terminating the tax cuts. The $250,000 level proved to be the most popular.

All respondents were asked to choose from three levels–$150,000, $250,000 and $500,000. The $250,000 threshold was the most common answer, with 43% choosing it. A greater number put the threshold to the lower level of $150,000 (28%) than put it at the higher level of $500,000 (23%), though not by a large margin.

There were significant partisan differences. A relatively large 39% of Republicans favored the higher threshold of $500,000, though a majority favored $250,000 or less. A relatively large number of independents (41%) and Democrats (32%) favored the lower threshold of $150,000, but in both cases a majority favored $250,000 or more.

Respondents were also presented, and asked to evaluate, two arguments in favor of each proposal. Almost all arguments were found persuasive by majorities, and by majorities of both parties. “In the public, most people see some validity in a range of different arguments,” commented Clay Ramsay, research director. “The fact that people in the study found many arguments persuasive shows they were really deliberating and pondering tradeoffs.”

For the most popular position–ending tax cuts only for incomes above $250,000–the strongest argument was based on concerns about reducing demand and hurting the economic recovery: “People with low to middle incomes shouldn’t be hit with a tax increase in an economic downturn. If they suddenly have less, this will reduce demand…but this isn’t true of the 1-2% with household incomes above $250,000–they aren’t going to change their spending because of a tax increase that represents only a small percentage of their overall income.” This was found convincing by 73%, including 71% of Republicans, 77% of Democrats, and 69% of independents.

The poll was fielded from December 3 to 9, 2011 with a sample size of 680 respondents. Thus, with a design effect of 1.6431, the margin of error was 4.8%. Please contact PPC if you would like a detailed sample design.

The poll was conducted using the web-enabled KnowledgePanel®, a probability-based panel designed to be representative of the U.S. population. Initially, participants are chosen scientifically by a random selection of telephone numbers and residential addresses. Persons in selected households are then invited by telephone or by mail to participate in the web-enabled KnowledgePanel®. For those who agree to participate, but do not already have Internet access, Knowledge Networks provides a laptop and ISP connection. More technical information is available at http://www.knowledgenetworks.com/ganp/reviewer-info.html.

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